The Union Cabinet has approved an additional instalment of Dearness Allowance (DA) for Central Government employees and Dearness Relief (DR) for pensioners, effective from January 1, 2024.
A 4% has been increased over the existing rate of 46% of the Basic Pay/Pension, aimed at offsetting the impact of rising prices. The total financial implication of both Dearness Allowance and Dearness Relief is estimated to be Rs.12,868.72 crore per annum.
This decision will directly benefit approximately 49.18 lakh Central Government employees and 67.95 lakh pensioners, claimed the press release released by the Ministry of Finance. The adjustment aligned with the established formula, which is based on the recommendations of the 7th Central Pay Commission.
The Dearness Allowance is paid to the employees and pensioners with regards to the changes in the cost of living. In October, 2023, the government hiked the DA by 4% on the existing rate of 42% which became 46%. And currently, the government hiked to 50%.
Dearness relief for pension or family pension refers to the assistance provided to pensioners or family pensioners to counteract the effects of inflation, as outlined in Rule 55-A of the CCS Pension Rules.
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